DHL deal with UPS faces scrutiny from APWU

Deutsche Post World Net's plans to restructure its DHL US Express business, announced last week, have come under scrutiny from the American Postal Workers Union and other lawmakers.

The transport and logistics company working towards a contract with UPS to provide airlift for its domestic and international shipments in North America. In the proposed agreement DHL will no longer use air carriers ABX and ASTAR. The two air carriers stand to lose as many as 8,200 jobs at the Wilmington Air Park.

“[An employee strike is] not something we're anticipating,” said Jonathan Baker, a spokesperson for DHL. “We're working closely with all of our partners to continue services and we have received assurances from both companies that they will continue to operate without any impact to the business.” ASTAR forwarded inquiries to DHL.

However, Baker went on to say that DHL may not be pulling out of Wilmington completely. “We will be transitioning the domestic air volume to UPS, which we believe will expect greater reliability,” he said, “but we will have a continuing need for operations at the DHL air park in Wilmington.”

He explains, “[The park] not only serves as a domestic air volume sorting facility but also handles ground volume and clears and sorts our international package volume. There is no decision yet as to where those operations will be located. It's possible they will continue in Wilmington.”

In total, this plan could cost upwards of $2 billion. DHL said it would decrease its infrastructure network in the US by 30% and reduce its ground linehaul network by 18%. Pickup and delivery routes will decrease 17%.

According to UPS the agreement, when finalized, will provide the company with $1 billion in additional revenue.

DHL plans to cut its 40,000-stong staff by 4%.

Baker says if the contract is implemented it would be a slow process. “This is not a transition that will take place overnight,” he said. “The plan is to transition a limited amount of volume this year and look for full implementation by the end of 2009.”

“We do believe that a smaller scale, more focused network will provide an even more resilient and reliable delivery service,” Baker said.